2 Midcap Stocks That Remain Attractive To Buy After the Market Plunge

Even as the markets have seen a dramatic collapse of nearly 8% in 7 trading sessions and there is a likelihood of a further fall in the markets, here are 2 stocks that have turned attractive. Now the markets have fallen largely on the possibility of the US Fed hiking interest rates.

Buy the stock of KRBL (India Gate Basmati Rice)

KRBL is a very big player in the rice business in India. In fact, it is the world's largest rice mill players and basmati rice exporters. It has the world's biggest rice milling plant in Punjab and owns the India Gate Basmati rice brand.

It has got several types of rice that are sold under the India Gate Brand. These include apart from basmati, rozanna rice, dubar rice etc. The company has grown its revenues and has had a superb marketing strategy, which has also built on the India Gate brand.

Financials and valuations

For the quarter ending Sept 30, 2021, the company reported revenues of Rs 1053.69 crores and a net profit of Rs 136.22 crores. The June quarter was almost the same with revenues of Rs 1030.88 crores and net profits of Rs 140 crores. The EPS for the first half ending Sept 30, 2021 translates to Rs 11.77. If we annualize the same, we arrive at an EPS of Rs 24 or thereabouts. At the current market price of Rs 237, the stock is discounted less than times. The company's dividend yield on the stock works to around 1.48%. The stock looks cheap fundamentally and remains a good pick.

Buy the stock of Oil India

Crude oil prices have surged to almost $90 a barrel and one of the beneficiaries of the same is definitely Oil India. The company is an oil and gas exploration company that is likely to see the next few quarters being robust as geo-political tensions have pushed crude oil prices higher.

We believe that a surge in economic activity and rising tensions on the Russia-Ukraine front would continue to keep crude oil prices elevated. The stock of Oil India is also cheap at a1-year forward price to earnings multiple of less than 8 times and a dividend yield of more than 2%. Buy the stock for its cheap valuations, good dividend yield and better prospects on rising crude prices.

A word on the markets

We believe that investors should just buy small quantities and not invest lumpsum in the markets. Indian markets are horrible expensive, thanks to relentless buying by mutual funds in the last few years, which have seen solid inflows from investors. We believe with interest rates across the globe rising and also in India, stocks might take a breather and getting stupendous returns like in 2021, would be far-fetched.

Disclaimer

Investing in equities is risky and investors must therefore understand the risk. The author and Greynium Information Technologies Pvt Ltd would not be responsible for any losses caused based on the article. The author and is family do not hold shares in any of the companies mentioned above.